A new report has suggested that the DoJ’s Live Nation investigation is intensifying. Photo Credit: Markus Winkler
In November of 2022, reports indicated that Live Nation and its Ticketmaster subsidiary were facing a Justice Department antitrust investigation. Now, a fresh report is shedding light upon the status of the probe, and a Live Nation exec is pushing back against the claims at hand.
New information about the investigation, media coverage of which seemed to initiate following the much-publicized Eras Tour pre-sale fiasco, just recently emerged in a Wall Street Journal piece. For background, said piece has arrived as Live Nation and Ticketmaster are facing continued lawmaker scrutiny and, according to a report from over the summer, the possibility of a quick-approaching antitrust lawsuit.
Though the Journal doesn’t appear to mention the latter, the appropriate article does state that the DoJ is currently zeroing in on the precise terms Live Nation offers artists and whether the Ticketmaster parent’s agreements restrict the ability of venues to work with different promoters or ticketing providers.
Also a focus are the allegedly inflated fees Live Nation can pay artists because it organizes shows through controlled venues, according to the report. At least as described in the article, some believe that the underlying market dominance ultimately results in Live Nation’s passing on costs to customers in the form of more expensive tickets.
“We do not understand [the] DOJ to be investigating any idea that it could be anticompetitive for us to pay artists more than others,” a Live Nation spokesperson relayed of the subject. “Artists get paid based on competitive bidding, and it would be strange, to say the least, for antitrust agencies to say that anyone should pay artists less.”
Furthermore, “recent months” have seen the Justice Department ask promoters, venues, and others “about competition in the market and their dealings with Live Nation,” according to the text.
Meanwhile, the DoJ has in “recent weeks” forwarded “document retention letters” to talent agencies responsible for negotiating deals with promoters, per the article and anonymous sources cited therein. The letters themselves are said to mention the artist-payout modifications Live Nation reportedly revealed in 2020, when crowd-based entertainment was on pause.
This afternoon, Live Nation posted its financials for Q3 2023, which execs have described as their business’s “strongest quarter ever.” Across the three-month stretch, revenue climbed to $8.15 billion, the resource shows, with a 32 percent year-over-year spike for concerts ($6.97 billion) and a 57 percent year-over-year improvement for ticketing ($832.6 million).
Predictably, the Justice Department investigation came up during the corresponding earnings call, and CFO Joe Berchtold pushed back against the Journal report when responding to a related investor question.
“Not surprisingly, it’s our impression that the DoJ is taking at least a first-level look at almost everything that our competitors complain about,” communicated Berchtold. “And from there, they look further at some issues and not others. And if they tell us they have a problem with something, we talk to them about it.
“But let me emphasize that as far as we can tell, nobody thinks that the fundamentals that drive our promotions business are unlawful. We pay top dollar to artists and provide them with top-notch tour support, and those are good things.
“I think the article also seems to reinforce that the investigation’s looking at specific business practices versus our overall business model. Which as I’ve said previously is my impression based on what I’ve heard.
“On the specifics in that article, on the agencies getting document-retention letters, I think generally anyone the DoJ seeks documents from gets a cover letter like this saying they should retain documents related to the investigation. So all this tells us is they think the agencies have relevant information, which seems pretty obvious given the topics that are being discussed and competitors complain about.
“Finally, we obviously find it interesting (as I think you tweeted) that the timing of this always seems to come up at earnings. We don’t think there’s any real news right now concerning the investigation. We’re completing our document production that they’ve asked for, we haven’t even started depositions.
“And our impression is that the investigation is kind of in its mid-stages at this point. And yet we have another news story on the day before earnings, which we don’t seem to think is a coincidence,” concluded Berchtold.